What is a Taxable Payments Annual Report?
Every year, businesses within certain industries are required to report information to the ATO on payments they make to contractors for services including; the amount paid, GST, ABN, address and name. This helps the ATO to determine if the contractors are being honest about their income reports. The industries required to report are:
- Building and Constructions Services
- IT Services
- Security, Investigation and Surveillance Services
- Cleaning Services
- Courier and Road Freight Services
The information generated is then used to determine if all the income is being included in the taxable income reported by the contractor.
What is the easiest way to get the information required for the TPAR?
Most software providers have the capability to complete and lodge the TPAR online. If your software provider does not, the easiest way to get the information is to run a General Ledger report for your Contractors/Consultants expense account and total up the payments to each Contractor.
Here is the Xero link for instructions on how to setup and run the report in Xero: https://central.xero.com/s/article/The-Taxable-Payments-Annual-Report
If you employee the services of contractors in your business, then you can keep a running tally of payments that have been paid during the year. Attached is an ATO-provided spreadsheet: https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/qc51601_worksheet.pdf
How do you know if you need to lodge a TPAR?
If you run a business in one of the above industries but are unsure if you need to lodge a TPAR, you can check on the ATO Business Portal or speak to your Accountant and they can check for you.
If you need help lodging your TPAR, please contact us at Adrians, we would be more than willing to help.